At the conclusion of Thursday’s full day hearing on the fairness of the proposed settlement in the Pigford II, Black Farmers class action discrimination lawsuit against USDA, Federal District Judge Paul Friedman for the District of Columbia said he would “act very promptly on the joint motion of lawyers for the farmers and the government for settlement.”

The Judge’s decision on the motion would lead to a 180 day claims period where “late filers” in the original Pigford case could present their actual written claims showing discrimination by USDA and requesting payment for damages. These claims will be reviewed by a panel of “neutrals” and placed in a pool for payment. The actual payments to farmers or their heirs will likely not be made until late 2012 or early 2013, after all claims are received and reviewed.

Based on legislation in Section 14012 of the 2008 Farm Bill, the late claim petitioners had to file between October 12, 1999 and September 15, 2000 and meet the qualifying criteria in the original Pigford I case, which covers discrimination by USDA during the 15 year period 1981 to 1996.

Farmers who filed after the September 15, 2000 deadline and before the June 2008 passage of the Farm Bill must show that they filed a late claim petition and will be considered “late-late filers”. Those who qualify and are approved in this category will receive 70% of the benefits received by late filers.

Congress has approved a finite amount of $1.25 billion for the settlement which must be used to pay all expenses including the lawyers, administration, notice, outreach and other costs as well as the payouts to farmers. In the settlement, the lawyers fee will range from 4.1 to 7.4% of the total settlement.

The settlement has a Track “A” and Track “B” option for farmers. The basic Tract “A” requires the substantial evidence requirement and promises a maximum payment of $50,000 with a $12,500 allowance to IRS to make the payment free of Federal tax obligation to the farmer. Track “B” requires more stringent evidence and allows up to a maximum of $250,000 in payments. Farmers who can show discrimination in a specific loan transaction with USDA may be able to get that debt waived as part of the settlement process.

Since the settlement amount is fixed, the amount paid to farmers will be adjusted on a prorated basis. As the number of farmers approved increases beyond around 18,000, the amount received by each successful applicant will be reduced from the original $50,000 promised.

There are 65,000 persons who submitted a late claim by the September 15, deadline. There may be 20,000 to 100,000 more who filed something after that date according to Attorney Hank Sanders, one of the Class Counsels in the case.

If half of the 65,000 late claim filers make a successful claim, the amount paid to each will decrease to around $25,000. If all 65,000 are found and make success claims, the payment to farmers could drop to around $10,000.

At the Fairness Hearing, Judge Friedman made opening remarks and then allowed three attorneys for the farmers - Hank Sanders, Greg Francis and Andrew Marks to speak. The lawyers pledged that each farmer who requested would receive a face-to-face meeting to fill out their claim form. They were followed by Mike Sitcov, Attorney with the U.S. Justice Department, representing USDA who made remarks for the government. The two sides supported the settlement agreement they had negotiated.

The Judge then heard from four groups, including Precious Martin Law Firm, Black Farmers and Agriculturalists (BFAA), Federation of Southern Cooperatives and National Black Farmers Alliance who had submitted written statements. In the afternoon, the Judge heard from individual Black farmers and advocates who wanted to speak for up to five minutes.

The representative of Precious Martin Law Firm argued that farmers should be allowed to opt out of the settlement. The Judge said it would be difficult to permit farmers to opt out because they would lose standing to bring claims because of the expiration of the statute of limitations which was extended by Congress only to those who participated in the Pigford I and II classes.

Tom Burrell representing BFFA also raised some objections to the settlement based on due process and questioning the finality of the decision of the neutral arbitrators.

Ralph Paige, Executive Director of the Federation of Southern Cooperatives, was concerned that the 180 day claims period may be too short; that no mechanism for appeals was included; and that several groups of farmers who never received a hearing on their discrimination claims were not included in the settlement.

Dr. Goldmon of the National Black Farmers Alliance was concerned about similar issues and wanted farmers to be able to change from Track B to Track A if they had insufficient evidence to support their cases.

Speakers in the afternoon, raised individual concerns and also said there was too much money being paid to the lawyers and not enough to the farmers.

At the conclusion of the hearing, Judge Friedman thanked everyone for participating especially farmers who gave personal testimonies. He said he would act promptly to make a decision on the settlement. He said, “ I am glad Congress has given us an opportunity to redo this, but they provided not nearly enough money. This settlement will not be perfect. It will not cure everyone’s problems with USDA. It will not by itself cause systemic change at USDA but has and will have impact on USDA’s policies and programs”.

For more information on the Pigford II settlement go to the website: www.blackfarmercase.com.